Tiny enterprises currently defined as those having investment in plant and machinery up to Rs. 25 lakhs constitute about 95% of the small scale sector. Government has taken various steps for the promotion of the tiny enterprises. These steps include earmarking of 60% of credit flowing to SSI sector under priority sector lending programme of banks for tiny units (40% for tiny units having investment in plant and machinery up to Rs.5 lakhs and 20% share to units having investment in plant and machinery between Rs. 5 lakhs to Rs. 25 lakhs).
Tiny enterprises have been made eligible for same rate of excise exemption as available to registered units since 1994-95. Excise exemption limit for SSI's including tiny units has been enhanced from Rs. 30 lakhs to Rs. 50 lakhs. This will give inducement to the tiny units for increasing their production.
Government has decided to adopt additional measures for the promotion of Tiny Enterprises by earmarking facilities for Tiny Units under the Integrated Infrastructural Development (IID) Scheme. The NSIC would earmark 40% of the assistance to the tiny units under various schemes viz., supply of machinery on hire purchase, marketing support, technology assistance, training facilities etc. In order to ensure flow of credit to tiny units, a consistent and higher flow of credit to tiny units, the SIDBI will endeavor that up to 60% of its refinance flows to tiny sector.
Products for Small Scale Unit
In India products have been reserved for exclusive manufacture in the SSI Sector for promoting this sector. Currently the investment limit for items to be manufactured in SSI is 1 crore. At present 812 items are reserved for manufacture in this sector. This Policy got a legal backing when the I (D&R) Act was amended in March, 1984 empowering the Government to reserve items under this Act. This Act also provided for the Constitution of an Advisory Committee headed by Secretary (SSI & ARI).
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